By KARI TOTONA
PNG Power Limited customers will benefit from a 2.7% reduction in electricity tariffs beginning next Friday.
PNG Power said in a statement that this was in addition to rebates being given to customers since December last year for low quality of services provided in respect of each service area.
“These are the undertakings by PNG Power under the watchful eyes of the Independent Consumer and Competition Commission (ICCC) in ensuring that the services provided and tariffs set are in line with the regulatory requirements.”
PNG Power acting chief executive officer Lawrence Solomon said this was the first time in the history of the company that it was reducing its tariffs by 2.7%.
He said that it was a New Year’s gift to PNG Power’s customers throughout the country.
Mr Solomon said the method used for setting its electricity tariffs was the same formula used to increase its tariffs over the years.
“The decrease is mainly attributed to the drop in the fuel prices over the 12-month period ending last Sept 30.
“During the first three quarters of this year, PNG Power has been relieved by the decrease in the fuel prices which is a cost savings for us and that savings has to be shared with our customers in the form of a reduction in tariffs,” he added.
Mr Solomon clarified that the price was determined by changes in the variables in economic and financial parameters in a formula given in the Electricity Regulatory Contract.
He said the benefits of reduced tariffs were not backdated but rather applied in the coming year’s tariffs as was the case for next year.
He said that the current level of fuel prices would help PNG Power achieve its capital works objectives next year.
He hoped that would be maintained throughout the year.
“If this happens, we may expect a very modest, if any, tariff increases for 2011, assuming the other factors do not move as much,” Mr Solomon said.